The Future of Membership Medicine

March 15, 2018

This healthcare expert believes concierge medicine is the future of healthcare due to its benefits for both patients and physicians.

While the future of healthcare in general remains uncertain, the future of membership medicine is actually quite clear. That might sound surprising, but by taking a look at the changing marketplace and how physicians have adapted, the future becomes obvious. 


Concierge medicine began about 15 years ago. It started with private solo physicians in high-income areas who transitioned their entire practices to a membership model of care known as "full model concierge." This practice model caught on quickly, with quite a few well-positioned physicians transitioning their practices. The model became popular with patients too, who valued the availability and attention they were able to get in a concierge practice.


The problem is, today there is limited growth opportunity for full model concierge. As more and more private physicians sell their practices or merge with larger groups, the number of physicians who are able to transform their practice into a model that limits the number of patients they see is diminishing rapidly. Large groups or health systems want more market share-not less. They generally do not endorse practice styles for employed physicians that take patients out of their system, which a limited membership concierge program would do.


For some doctors, particularly older doctors who are not yet ready to retire but need to reduce the pressure and pace of their practice, the full model still works. But the trend shows that many doctors are choosing the security of a large employer and the guarantee of higher reimbursement rates. To go "full model" would mean taking a chance, dismissing patients and maybe even staff. What if it doesn't go well?  


Another style of membership medicine that is currently getting attention is "Direct Primary Care" or DPC. In this model, a physician stops accepting insurance plans and government programs and instead collects monthly payments from patients. In exchange, the physician offers unlimited visits at no additional charge. Some people, especially politicians, see DPC as a revolutionary growth market and a cost effective alternative to traditional insurance. The problem is, it's definitely not. 


There are many issues associated with the model from a patient and a physician perspective.  For patients, they will still need to purchase a high deductible traditional insurance plan to cover anything outside of primary care. The DPC membership fees cannot be used toward their deducible. Referrals to specialists or for testing from an out-of-network DPC doctor are not accepted. And despite the chatter, there really isn't demand for this kind of market. Since most people only see a primary care doctor two or three times a year on average, costing under $300, why bother paying a membership fee? It makes more sense to just pay fee-for-service to an in-network provider, where payments can at least count toward their deductable.


From a physician perspective, the future of DPC is even bleaker. The growth of DPC is misleading-there appears to be growth but only because the model started from zero. The truth is, the largest network of DPC doctors, Qliance, went out of business last summer. The DPC Journal reports that 80 percent of DPC physicians cannot support themselves with their practice and are moonlighting as hospitalists or at urgent care clinics, etc. The market just isn't there.


So what's the membership model of the future? Hybrid Concierge, where patients are given the option of joining a limited membership concierge program within a traditional practice. Typically, only between 3-10 percent of patients join. While the membership numbers may seem small, an average hybrid program generates more than $100,000 per year for a participating physician-a significant revenue bump!


Why is Hybrid Concierge the future? It's the only version of membership medicine that allows a physician to continue to see all patients and accept insurance programs. It's the only membership model that aligns with the vertically integrated business model of a large health system. In fact, hospitals are discovering the program actually improves the morale of employed physicians, and helps them generate more per-hour revenue while maintaining a full and active patient panel. 


Hybrid concierge is low risk. There is a limited number of patients who have interest in paying out of pocket for a membership program. In a Hybrid, the limited membership program is all extra revenue for the physician, on top of their regular earnings. Since the traditional practice is maintained, there is only a financial upside for a hybrid concierge physician.


Hybrid concierge also works very well for specialists like cardiologists, endocrinologists and gastroenterologists who see a healthy cross section of patients on an ongoing basis. And, unlike full model concierge, hybrid concierge isn't just for very wealthy areas. Since only a small portion of the patient panel joins a hybrid, a much wider demographic profile can be supported. The market for growth is much bigger.


Physicians also like the concept of hybrid concierge for personal reasons. Many have been in practice for years, serving their community and feel uncomfortable telling longstanding patients they have to join a membership program or be dismissed. A hybrid program means no one is dismissed, but the option of participating in the program is offered. The patients who join tend to be the practice's most loyal patients who truly value their doctor and the care they receive.